Making Home Affordable: The Obama Loan Modification Program

Earlier this month, details were released about the “Making Home Affordable” program as part of the Emergency Economic Stabilization Act that was passed through congress and signed by President Obama.  The Making Home Affordable program offers assistance to homeowners across America in one of two ways: the Home Affordable Refinance Program and the Homeowner Affordable Modification Plan.

While the plan is fairly comprehensive and much better than the FHA Secure plan (it was so ineffective that it has been discontinued) or the FHA Hope for Homeowners plan (it never really got off the ground) it is somewhat unclear if the plan will help homeowners here in Arizona who are struggling with their mortgage and owe significantly more on their mortgage than their home is now worth.

Qualification Requirements for the Home Affordable Modification Program Include:

1. It applies to owner occupied primary residence only
2. Does not apply to loans that have a balance in excess of $729,750
3. Loan must be originated prior to January 2009
4. Debt to income ratio must be greater than 31% of gross income
5. Mortgage payment no longer affordable due to significant change in income or expenses

Home Affordable Modification Program Limitations Include:

1. Doesn’t apply to loans that have a balance in excess of $729,750
2. Borrowers who are unemployed or have insufficient income levels may not qualify
3. Second homes, investment properties or lot loans do not qualify

In short, the Home Affordable Modification Program will help people, but it won’t help everyone. If you think that you may be a candidate for a loan modification under the Home Affordable Modification plan, the first step is to contact your lender, all lenders should be familiar with the plan and be able to give you more information about how you apply for the program.

If your lender is not helpful, you can also contact (free of charge) the Hope Now program to speak with a counselor who is familiar with the program and can help you understand more about your options.

If you are still find it difficult to get help in your situation, we have also provided a list of excellent Arizona loan modification companies/lawyers who can help you. Keep in mind, these people charge a fee for their services and each company has a different fee structure.

Lastly, you can also find more information about the Making Home Affordable loan modification loan program at the official Treasury Department website for the Home Affordable Program.